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The Dollar Is Dead

mathmeetsmoney.substack.com

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Re: The Dollar Is Dead

#161

Post by bootsmann »

TrackerFF wrote: post #120
bootsmann wrote: post #37

Earlier quoted context omitted.

The dollar has lost 15% vis-a-vis the euro this year, how does your theory explain this?

There's a sitting POTUS that wants to devalue the dollar, in order to stimulate domestic production, and exports. "But what about the stuff that the factories import, to produce anything?" one might ask. Well, Trump wants no such imports - he wants the people selling stuff to the US, to relocate to the US. Note: I'm not in favor for what Trump tries to do, but it explains why there's so little concern for the droppin…

Its not about concern (the dollar dropping while Trump is putting on tariffs is very concerning, it should be appreciating) its more about the fact that the dollar value seems to be influenced by things other than military strength.

Re: The Dollar Is Dead

#162

Post by saubeidl »

dia80 wrote: post #21
saubeidl wrote: post #16

Earlier quoted context omitted.

I think a lot depends on whether the US keeps being an unreliable actor and thus a pain to deal with. If there's enough pain, it'll outweigh the pain of switching.

If you are using the dollar right now, what pain are you taking? None. What's actually happened? US added some tariffs and became a bit more isolationist and the Fed has lost some independence. Might not bode well for the future but has very little impact on today.

Idk man, it's lost 15% against the euro this year alone...

Re: The Dollar Is Dead

#163

Post by pseudo0 »

nostromo wrote: post #139
crooked-v wrote: post #115

Earlier quoted context omitted.

The US is a long way away from trying to "soak" anyone. We have a top rate on long-term capital gains of 20%.

That's pretty average (which is a good thing). Japan: 20% China: 20% India: 13% UK: 24% Italy: 26% Germany: 26% France: 30% Then there's Canada of course... 50% with a proposal to make it 66% in 2026. Let's see how that works out!

Isn't it a 50% inclusion rate for capital gains in Canada? That works out to a maximum tax rate of 27% in the top tax bracket. And they canceled the proposed increase to a 66% inclusion rate, which is probably smart considering how a ton of rich Canadians already move to Florida.

Re: The Dollar Is Dead

#164

Post by starmole »

This article is initially very well written and convincing. And it started to stress me out a little bit! Am I at great risk for having most of my wealth tied to the dollar?

But taking a step back: It is making very strong predictions for a future state of what I would consider a chaotic system. As the author identifies as a Physicist and not a Psychic, why is there no mention of uncertainty? No mention of how you would test or refute the prediction?

Looking at very selectively picked graphs is like reading tea leaves.

If even just a few people read the article and change their investment strategy as a result you already affected the outcome.

Re: The Dollar Is Dead

#165

Post by robocat »

crooked-v wrote: post #93
kesor wrote: post #47

Fiat currencies are like Unicorns and Santa Claus, they stop existing when people grow up and stop believing in them. And there is no need for a "replacement" (i.e. the nothing is better argument) or a need for "enforcement" (i.e. the military argument) or a need for a "system" (i.e. the rule-based-order & courts argument). Fiat currencies simply die off due to lack of trust and belief, and it often happens by way of…

Fiat currencies are the "grown up" result of realizing that everything else in modern society depends on people believing in the social contract, and that doing the same with currency is both more stable and more predictable than having an economy that depends on the amounts currently available of arbitrarily chosen rare metals.

I would be interested to see if we could create an hours-worked currency.

Every person is given a similar amount of lifetime (only a few countries are exceptions).

Time can't inflate or deflate, is understood by all and easily measured, and it can't be stored. Taking it from others or trading it between people is difficult (we use money as a proxy instead).

Some obvious problems: quality of time, the value of different people's time is variable, retirement.

Re: The Dollar Is Dead

#166

Post by fragmede »

toomuchtodo wrote: post #150
nostromo wrote: post #145

Earlier quoted context omitted.

People are turning melted rocks into thinking machines and general purpose robots and you're like "it's all basically pets.com." It's hard to take your point of view seriously after that honestly.

If you think an LLM is a thinking machine, I don’t know what to tell you. They are great at predicting tokens, but there is no evidence they are thinking in the human sense. They rely on patterns and probabilities, not understanding. Powerful search engines, certainly, but there is much work ahead to see how hard the limits being bumped up against are. https://direct.mit.edu/opmi/article/doi/10.1162/opmi_a_00160... h…

Without getting hung up on the definition of the word "think", the fact that anyone can feed an LLM a couple of bullet points and generate a pile of convincing sounding marketing copy, is worth something if you're to someone. We can disagree on exactly how much and to whom, but if you're not willing to see that as fact then there's no common ground to base a conversation on.

Re: The Dollar Is Dead

#167

Post by cperciva »

pseudo0 wrote: post #163
nostromo wrote: post #139

Earlier quoted context omitted.

That's pretty average (which is a good thing). Japan: 20% China: 20% India: 13% UK: 24% Italy: 26% Germany: 26% France: 30% Then there's Canada of course... 50% with a proposal to make it 66% in 2026. Let's see how that works out!

Isn't it a 50% inclusion rate for capital gains in Canada? That works out to a maximum tax rate of 27% in the top tax bracket. And they canceled the proposed increase to a 66% inclusion rate, which is probably smart considering how a ton of rich Canadians already move to Florida.

Yes that's correct.

Re: The Dollar Is Dead

#168

Post by cjs_ac »

sparrish wrote: post #122
bix6 wrote: post #46

“The Dollar is Dead. Long live whatever comes next.” So what will come next? It can’t be gold because we already tried that. I don’t see the West letting BRICS have it. Crypto seems too polarizing.

Why can't it be gold again? It was working pretty well for thousands of years.

The part where countries engage in warlike activities against each other to get their hands on more gold sounds like it would cause economic uncertainty.

Re: The Dollar Is Dead

#169

Post by lossolo »

nostromo wrote: post #129
toomuchtodo wrote: post #86

Earlier quoted context omitted.

Growth is over globally except India and Africa due to demographics [1]. Developed countries and unions will compete for the last of the world’s young, prime age workers over the next century. Financial stability will be a function of who manages this situation to the best of their circumstances. Can you attract and retain these workers and leverage that for economic success? If so, that’s where investment will flow…

Having billions of low-skill "prime age workers" is not a good thing in the AI era. Africa's population surge is a liability as much as it is a benefit, especially considering they already have to import a large portion of their food supplies. Africa is 20% of world population but just 2% of world GDP... Maybe they will turn into China at some point, but I wouldn't bet on it yet.

> Africa's population surge is a liability as much as it is a benefit, especially considering they already have to import a large portion of their food supplies.

They also need to import phones, dishwashers, and cars. But how many cars do you really use? How many phones?

Africa's population growth is projected to drive steady demand for consumer products, while the West and parts of Asia are expected to see a decline. They have abundant natural resources, and they’re likely to become the cheapest labor force after countries like Vietnam and Thailand see rising wages and living standards.

We’re already seeing this in China, where wage growth is pushing some manufacturing to neighboring, lower cost countries.

Demand is ultimately limited by the number of people. You can produce as many goods as you want using AI powered factories but without demand, they’ll just end up in the garbage.

Re: The Dollar Is Dead

#170

Post by lvl155 »

bootsmann wrote: post #37
lvl155 wrote: post #17

USD strength comes from military. Just as it was the case with all other currencies in the past. Do you see anyone challenging the US in a conflict? China won’t even invade Taiwan because they are afraid. ‘Nuff said.

The dollar has lost 15% vis-a-vis the euro this year, how does your theory explain this?

It lost 15% because Trump is undermining the US? What’s there to explain? Does US still have its military? Yes. Do you think currencies stay completely stagnant over even one week? It’s driven by a myriad of market forces.
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